This post is about how to start a provision store business in South Africa this 2022. If you have ever thought of starting a provision store/grocery business or a mini supermarket in the country and you do not know how to go about starting it, do not worry as we have written this article just for you. Do kindly read through this post in order to digest all the valuable information that you will need to set up your provision store.
A provision/grocery store business in the country is very profitable especially as our population is ever increasing. Many families in South Africa buy provisions almost always and because the demand for grocery products is always on the rise, if you venture into this business, you stand a real chance of making it big.
You must however, ensure to properly understand how the provision business works before you start up your own business in this line and since you are not the only one with this business idea, you should do well to get the right orientation of the business to know its ins and outs, as well as its merits and demerits in order to be fully and properly prepared for your journey into the grocery business industry.
As we continue, we will provide you with useful information on how you can successfully start up your provision or grocery store business in South Africa irrespective of the competition and challenges that you may encounter along the way. We will also provide you with a comprehensive list of items that are needed in order to start up a provision store in South Africa.
STEP BY STEP GUIDE ON HOW TO START PROVISION/GROCERY STORE BUSINESS IN South Africa 2022
The following are the steps to take in order to start up a provision or grocery store business in South Africa this 2022:
CONDUCT A FEASIBILITY STUDY FOR YOUR PROVISION STORE BUSINESS
Conducting a feasibility study for your provision store/grocery business is very important as it allows you to understand in detail the nature of the business before starting it. Understanding how the business works is very fundamental to your success when you finally venture into it.
If you are only focused on the provision store business, it means that your focus will be strictly the sales of provisions alone without adding perishable goods like fruits, meat, grains, vegetables, etc, to your stock. As a provision store business person, you can either become a wholesaler or a retailer but many of the people doing this business are retailers who sell directly to the final consumers. In order to become a retailer you will need to discuss with wholesalers who will supply you with your goods at discounted rates.
If you however, decide to become a wholesaler of provision products, you will need to directly contact the producers of your goods in order to negotiate and strike up an agreement on how your goods should be supplied and what days they should be supplied in very large quantities at a price that sits well with you and the producers.
Also, you may decide to take your provision store business to a higher level by making it a grocery store or mini supermarket business. As a grocery store or mini supermarket owner, you have added dairy products, staple foodstuffs, meats, produce, etc to the sales of your provisions or household supplies.
You can also decide to go all out and become a large scale supermarket business owner like the likes of Shoprite, Prince Ebeano Supermarket, Addide, SPAR, CCD, to mention but a few.
After deciding upon the type of provision store business you want to run, you will need to also decide on the items to purchase in order to stock up your shop and at a particular quantity so as to allow space for other items as well.
Endeavour to look out for products that are self selling and stock up your shop with them. Irrespective of how many companies produce similar products, go for the one that sells the most, and buy other similar products in lower quantities in order for you to understand consumer behaviour and the buying preferences of your customers better. This will help you to understand what quantities to purchase for your provision store business in the future.
Are you going into this business as a retailer? Then you should find yourself some trusted wholesalers that will help you identify fast/self selling consumer goods. Ensure that you listen attentively to the responses of the wholesalers concerning particular products and compare each response so as to make up your mind on which product you will purchase to get your provision store business up and ready.
You should also take out time to study your competitors and their activities in order to be well placed to succeed in this provision store business in South Africa. This will help you decide on the dos and don’ts of your business and it can go a long way to help with your customer retention.
DRAW UP A BUSINESS PLAN FOR YOUR PROVISION/GROCERY STORE BUSINESS
You should make sure to draw up a good business plan that will help you succeed in the provision/grocery store business in the long term. This is what a good feasibility study does; it helps you with the necessary information that will help you shape up your business plan and set you up for success. Make certain that you really have a good understanding of your potential customers and competitors before proceeding to draw up a business plan.
Have a good understanding of your target market because as a provision/grocery store business owner, you will be providing your services to the entire neighborhood in your area. They are your target market, so make sure that people of all ages are factored into your plan before you commence your business.
You must have done your homework in this provision business before drawing up your business plan.
Your business plan helps you to clearly define what aspect of provision business you want venture into, the size of the business, and how do you intend to compete favourably with those that have gone into the business before you.
In the business plan for your provision store business, you should consider the following:
- Your customers’ background
- Your provision/grocery store business location
- The standard of living of your potential customers
- The products that your potential customers love to consume
- How often they buy these products
- Lastly, you should devise a plan on how to retain your customers when you eventually venture into the business.
Your customers preferences largely determine what type of products you should stock up for your provision business. Do not stock products you feel they will get used to, you may be setting yourself up for failure; make sure you study your customer behaviour and how often they purchase a particular product and endeavour to stock your shop with those products. This is very important for your business and it can never be overemphasized.
Also make plans to periodically check your inventory so as to identify the products that have been in your shop for more than one month. This will help you reduce the number of that particular product when next you are making a purchase to stock up your shop.
MAKE AVAILABLE THE CAPITAL NEEDED FOR YOUR PROVISION STORE BUSINESS
The next stage after conducting your feasibility studies and drawing up your business plan is to make ready your capital for your provision store business. This should serve as your budget for starting up this business.
Certain factors determine the amount of capital needed to start your provision store business in South Africa such as the location of the business, the size of the business, the number of employees you intend to hire if any.
If you intend to start up a small scale provision store, the capital required for this is anything between R$ 3,660 – R$ 7,320 or more, depending on the cost of setting up a kiosk, and the type of consumer goods you want to stock in it. Owning a kiosk is a good way to avoid paying rent but you may need to part with a small fee in order to set up your kiosk on the piece of land that you’re occupying.
The capital for medium scale provision store business can cost from anything between R$ 12,810 – R$ 18,300 or more if you are renting a shop and stocking it up with the necessary goods required to start up your grocery store. Keep in mind that the cost of renting a shop varies from place to place.
Large scale provision stores such as a mini supermarket require large capitals and you will need between R$ 549,000 – R$ 732,000 or more to fully establish your business. If you are hiring workers and putting in place heavy duty generators to power your business, you will need to spend more. Taking a loan from the bank which you’re confident of paying back within the agreed period is advised.
The following are some of the items needed to start up a provision/grocery store in South Africa
- Books for inventory
- Wooden shelves
- A table or tables with drawers
- Shopping bags
- Carts (if you own a mini supermarket)
- CCTV cameras (for a mini supermarket)
- Your consumer goods (The reason you’re setting up the provision business in the first place).
FIND A GOOD LOCATION FOR YOUR PROVISION STORE BUSINESS
Where you locate your shop also matters and as a wise person, you should not go and site your provision/grocery store business next to several other shops in your area that are doing the same business. You may lose badly before even starting and this is because many of the people who started the business in an area saturated with the same services as yours all have their customers.
You cannot compete with them, therefore it is advisable to look for a good place where you will be visible enough to be seen as the leading figure in your line of business. A good location is a very important for your business. You can locate your shop at strategic places in the city centre or a busy place such as a market where a good number of people go to shop there. This will increase your customer base significantly.
FIND CREDIBLE AND RELIABLE SUPPLIERS FOR YOUR PROVISION STORE BUSINESS
It is very important to find the right suppliers for your business. Credible and reliable wholesalers that can supply you at good rates are the people you should be looking out for. You should have at least three credible suppliers so that if for any reason whatsoever, one fails to supply, you can fall on the other two and your business will not be negatively impacted. A great relationship with your suppliers can help you enjoy great benefits in the long term like discounted prices, credit purchase and some incentives at year ends.
STOCK UP YOUR PROVISION/GROCERY STORE
Your target market, their consumer behaviour and the location of the business all determine what you stock up your provision store with. Whatever the case, ensure that you find the right balance so as not to run at a loss.
Provision items that you can stock up your shop with include the following:
- Cold water starch
- Spray starch, etc.
- Toilet soap
- Liquid soap
- Tissue paper
- Baby wipes
- Toilet cleaners
- Body cream
- Facial cream
- Hair cream
- Nose mask
- Deodorant, etc.
Drinks and Beverages
- Soft drinks
- Gin, etc.
- Light bulbs
- Mosquito repellent
- Super glue
- Shoe polish
- Air freshener, etc.
- Cheese, etc.
- Meat pie
- Chicken pie
- Sausage rolls, etc.
Seasoning and Spices
- Culinary spices such as cinnamon, paprika, aleppo hot pepper, chili pepper, ground or coarsely chopped pepper, cumin, tumeric, garlic, saffron, cloves, and ginger.
- Cooking herbs such as basil, oregano, marjoram, parsley, rosemary, thyme and dill.
- Wet blends such as vinegar, ketchup, mustard, tomato paste, etc.
- Razor blade
- A4 Papers
- Cardboard paper
- Math set,
- Graph books, etc.
REGISTER YOUR PROVISION STORE BUSINESS
Register your grocery store business with the Corporate Affairs Commission (CAC) of South Africa in order to be recognized as genuine. You can refer to the link provided to know how to register a business name in South Africa.
ADVERTISE YOUR PROVISION STORE BUSINESS
Advertising your business through the right channels available can project it farther than your imaginations. Do not stay quiet about your provision/grocery store business but take advantage of the various advertising channels to get across to your potential customers. This is a very important step and should never be ignored.
Because South Africans purchase household items almost always, this makes provision store business a very lucrative business. Ensure to invest properly in your business if you want to see results and try as much as possible to understand all the basic steps required for establishing a grocery store business before you decide to put your money in it.
As always, our articles are for informational purposes only and they serve as a guide. This information is not absolute and we advise that you take out time to go and make your findings before venturing into provision store business in South Africa.